If a competitive market has three firms with marginal costs ofMC1=Q1,MC2= 0.50Q2, andMC3= 2Q3and faces a market price of $10, the total quantity supplied by all three firms is:
To find the total quantity supplied by the three firms in a competitive market, we need to determine the quantity each firm will supply at the market price of $10. Each firm will set its marginal cost (MC) equal to the market price to find the quantity it will supply.
Firm 1: [ MC_1 = Q_1 ] Setting (MC_1) equal to the market price: [ Q_1 = 10 ]
Firm 2: [ MC_2 = 0.50Q_2 ] Setting (MC_2) equal to the market price: [ 0.50Q_2 = 10 \implies Q_2 = \frac{10}{0.50} = 20 ]
Firm 3: [ MC_3 = 2Q_3 ] Setting (MC_3) equal to the market price: [ 2Q_3 = 10 \implies Q_3 = \frac{10}{2} = 5 ]
Now, we can find the total quantity supplied by all three firms: [ Q_{total} = Q_1 + Q_2 + Q_3 = 10 + 20 + 5 = 35 ]
Thus, the total quantity supplied by all three firms is **